Private equity firm General Atlantic Partners may raise its stake in Patni Computer Systems Ltd. by buying some of the founders' holdings, the Economic Times reported on Friday, citing unnamed sources.
Gajendra and Ashok Patni, two of the three brothers who founded the software services firm, are looking to sell their stakes, the newspaper said. Their holding in the company total about 29 percent.
General Atlantic currently owns 16.4 percent of the New York-listed Patni.
Business Standard daily said the two brothers were close to selling nearly 20 percent of Patni, and other private equity funds such as Apax Partners and Blackstone were also in the race.
“Leading global private equity firms have shown an on-going interest in the company,” Chairman and Chief Executive Narendra Patni, who holds about 15 percent of the company, told Reuters in an e-mailed statement.
He declined to name the suitors nor comment on the Business Standard report which said he may pick up part of his brothers' holding. “I could not speculate, it all depends on the stake, which would become available and the appetite of the investors.”
Narendra, who along with his two brothers founded the company in 1978, said like any shareholder his brothers were free to sell their holding.
“In fact, they have been selling shares in the market from time to time and have sold approximately 6 million shares since the IPO,” he said. The company was listed in February, 2004.
In April, Patni, which counts General Electric Co. and ABN AMRO among its clients, posted a 90 percent jump in quarterly profit, but said wage hikes and a stronger rupee would squeeze earnings in April-June.
Mid-sized Indian software services firms are facing an uphill task as customers prefer to give large, multi-year contracts to leading developers such as Infosys Technologies Ltd. and Tata Consultancy Services Ltd.
Also piling pressure are global firms such as International Business Machines Corp. who are aggressively ramping up their Indian operations, luring talent away from domestic developers.
In June last year, U.S. firm Electronic Data Systems Corp. completed a $380 million deal to take a majority stake in MphasiS Ltd.
In August, Oracle Corp. bought 41 percent of banking software firm i-flex solutions ltd. Oracle owned about 81 percent of i-flex at end-March.
Shares in Patni ended 1.1 percent lower at 555.10 rupees, after rising as high as 570.80, while the main Mumbai index fell 0.86 percent. The stock has risen about 48 percent since April on stake sale talks.
Source :Reuters